In a somewhat ironic twist on the Federal Aviation Administration’s (“FAA”) usual position, on March 26, 2018, FAA ruled in favor of the Town of East Hampton, New York (“Town”), proprietor of the East Hampton Airport, in a challenge by the National Business Aviation Association (“NBAA”) under FAA regulation 14 C.F.R. Part 16, to the expenditure of airport revenues in defense of the Town’s self-imposed airport noise and access restrictions.
On November 7, 2014, the Federal Aviation Administration (“FAA”) published its “Final Policy Amendment” (“Amendment”) to its “Policy and Procedures Concerning the Use of Airport Revenue,” first published 15 years ago in the Federal Register at 64 Fed.Reg. 7696, February 16, 1999 (“Revenue Use Policy”). The Amendment formally adopts FAA’s interpretation of the Federal requirements for use of revenue derived from taxes including sales taxes on aviation fuel imposed by both airport sponsors and governmental agencies, local and State, that are non-airport operators.
Many in the aviation community have been monitoring the progress of Chicago’s efforts to privatize Midway International Airport (MDW) under the Federal Aviation Administration’s (FAA) Airport Privatization Pilot Program. The City faces a July 31, 2010 deadline to either select a private operator for MDW or seek an extension of the City’s slot in the Program from the FAA. Chicago is the only approved applicant for the Program’s only large-hub slot. If the application is approved, MDW would be the first privatized large-hub airport in the U.S.
The Airport Privatization Pilot Program was established in 1996 by Section 149 of the Federal Aviation Administration Authorization Act, which added a new Section 47134 to Title 49 of the U.S. Code. Section 47134 authorizes the Secretary of Transportation and, through delegation, the FAA Administrator, to exempt a sponsor of a public use airport that has received Federal assistance from certain Federal requirements in connection with the privatization of the airport by sale or lease to a private party.